Laboratory Services and Compliance in Billing

Each year the American Medical Association publishes updated CPT (Compliant Procedure Terminology) codes and ICD-9 (Diagnosis) codes which describe billable services we perform for patient care. These codes are the language we use to document and communicate to payers in billing for the services we perform.

When laboratory tests are ordered via POE or by requisitions submitted with the specimen, these tests/codes ordered and performed result in one or more CPT codes on the patient bill, along with a charge for that standard CPT code. These CPT codes reflecting the procedures performed must also be accompanied by the diagnosis codes supplied by the physician or healthcare provider for the date of service.

Medicare and other insurance payers frequently audit our patient bills together with the documented orders and diagnoses written in the patient medical records to assure that only those procedures ordered are billed. Furthermore, the procedures ordered must be deemed medically necessary; that is, it is documented that the patient demonstrated signs and symptoms which justify the tests ordered.

Many tests ordered and performed by the laboratory are not paid by Medicare because medical necessity was not documented in the clinic notes, or was not reflectively coded with ICD-9 diagnosis codes which describe the patient’s signs and symptoms, for transposition to the patient bill. Many of the most commonly ordered laboratory tests such as Heme-8, Prothrombin time, Thyroid tests, Urine culture, PSA, HIV tests and others are often rejected for payment. These tests are considered screening tests if signs and symptoms reflecting medical necessity are not documented in the clinic notes, and coded for billing.

Our laboratory compliance code of conduct dictates our actions regarding ethical performance and accurate billing of only those tests ordered by a credentialed healthcare professional. Laboratory personnel cannot order tests, or add tests, except those confirmed and documented by the healthcare provider, or those reflex tests which are pre-approved by the Medical Board as necessary for efficient patient care. Our approved reflex test list is posted on our website.

It is important that any tests not performed/resulted in PDS be cancelled in a timely manner, as this cancels the patient charge. Repeat testing on the same date of service is not billable unless ordered by the healthcare professional at a later time of day. Repeat tests for quality control or confirmation of a billed test is not also billable.

Every employee is responsible for ethical decisionmaking and adherence to laboratory policies and procedures essential for laboratory compliance in billing. Compliance with federal regulations for quality performance and correct billing is consistent with the mission, vision, and core values of the Johns Hopkins Hospital. Your questions or concerns regarding billing issues should be brought to the attention of your supervisors and/or anyone in laboratory administration to be addressed. The Laboratory Compliance Committee meets monthly to discuss and resolve laboratory billing issues. You may also anonymously report any concerns of unethical billing issues to 1-877-We Comply.

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One Response to “Laboratory Services and Compliance in Billing”

My question is around OP lab orders; when a patient comes to the OP lab center with a physician script but the physician did not sign the script, do you send the patient away? We require 5 components of a complete order: Full name, date, tests, medical necessity (ICD-9 codes) and physician signature. Do you ever proceed with an order that does not have codes or signature and follow up to get what is missing with the physician’s office within that same shift? We have the most trouble in the early hours and late hours when the doctor’s offices are closed; then the patient’s are sent away until we can get what is needed. The lab has 48 hours for doctor’s signature on verbal orders according to MCR; does this apply to the OP testing areas as well?
Thank you.